June 24, 2016 12:35 PM

Greenfield: Oh Where, Oh Where Can Our Tax Revenue Be?

Our number cruncher Dr. Stuart Greenfield with an update on the fiscal reality we may face as legislators arrive for the 85th regular session of the Legislature

The Certified Revenue Estimate (CRE) released in October 2015 predicted total tax collections would decrease by 3.8 percent in FY16 and increase by 4.9 percent in FY17. This translates to a decrease of 0.8 percent in total tax collections for the FY16-17 biennium.

As we enter the 4th quarter of FY16 and shortly the general election campaign season, candidates for the 85th Texas Legislature and the citizens of the state should at least have a general idea of the fiscal situation that will be faced.

Figure 1 shows that the negative YTD growth in tax collections (-6.9 percent) is substantially greater than the estimated negative rate (-3.8 percent) for FY16. Fortunately, the YTD growth rate in total state non-tax revenue (12.7 percent) is more than ten times, an order of magnitude, greater than the Comptroller’s estimated non-tax growth rate (1.0 percent). This has resulted in total state revenue increasing by 3.2 percent compared to the 1.8 percent decline in the CRE.

The full column by Dr. Stuart Greenfield is in the R&D Department.

By Dr. Stuart Greenfield